Asia's richest man, Wang Jianlin, suddenly finds himself cornered. The giant Dalian Wanda Group, which he heads, is facing a range of regulatory investigations and actions from the Chinese authorities.

The latest move involves asking banks to stop financing overseas forays of the Wanda Group, which owns an array of foreign assets, including a Hollywood studio and AMC Theaters, the biggest exhibitor of movies in the U.S.

The Group faced a regulatory probe into its financial deals in early June, which was followed by an announcement that Wanda had sold off part of its business to a Tianjin based real estate developer for $9.3 billion.

The government action against a businessman known for his strong connections with the Communist Party has caused a stir in the business community, with many asking if the government is sending out a political message to all privately owned businesses, informed sources said.

Role of politics

"That is a surprising development in a lot of different ways. Wang Jianlin has many friends all through the political establishment in China," said Christopher Balding, an associate professor of finance and economics at Peking University HSBC Business School.

The industry in China is debating about whether the Wanda Group has been hit by a policy measure or Wang has fallen from the grace of the political establishment.

“I don't think this [action] is particularly targeting Mr. Wang, the chairman of Wanda Group, or purposefully targeting the Wanda group," said Peng Liu, professor of real estate and hotel management at the Cornell University. “Actually, those [moves] are in line with the government action on control of financial risks.”

Wanda Group's recent deals include the $930 million acquisition of the Nordic Cinema Group in January, and the $1.1 billion purchase of Carmike Cinemas, the fourth-largest cinema operator in America. But Wang faced a rare setback early this year when he was forced to abandon a $1 billion takeover of Hollywood-based Dick Clark Productions.

On the face of it, the government is asking companies to cut down on their financial risks and stop adding pressure on China's foreign exchange reserves.

But the signals go deeper than that because the action involves one of China's best-known companies and comes ahead of a crucial Communist Party meeting which will determine the fate of some of the country’s top leaders.

“It is not far fetched to say that there is definitely a political message being sent, and they are using Wanda as an example to other companies, (to say) 'don't do this'," Balding said, adding, “And it is also a signal that there is a political fighting going on behind the scenes.”

Corporate vs government power

Giant multinationals are sometimes regarded as the sources of big power, who often influence government policies in different countries. Beijing may not be comfortable with additional power groups during its own influence gathering pursuit through the Belt and Road program, analysts said.

Yue Su, an economist with The Economist Intelligence Unit (EIU), pointed out the government has been investigating two other companies, Fosun and Anbang, who were engaged in aggressive buying of business assets overseas.

“The government is also worried that these companies are trying to move asset abroad and keep their debt within the country, which is worsening domestic economic conditions,” she said.

Wider impact

Besides Wanda, many Chinese companies have been forced to revise their investment plans as the government reversed its earlier policy of encouraging them to acquire foreign brands and assets.

Beijing has since intensified its battle against capital flight amid a reduction in foreign exchange reserves early this year. This came as a shock to several companies who were forced to cut down their long range plans for growth in the international market.

“Another thing that needs to be pointed out is it was only 12-24 months ago that Chinese regulators were strongly encouraging Chinese companies to go out and make foreign acquisitions," Balding said. "So, this was not done in a vacuum. So while Wanda may have pushed the limits, they were doing nothing more than what they were being encouraged to do by Chinese regulators.”

The government action to cut off funding to Wanda, and possibly to other companies, may have major consequences for China's industrial economy.

“So consequently if their access is cut off, that could have a very significant impact on not just their ability to make foreign acquisitions but to do a lot of different things,” Balding said.

Peng Liu said the government will make a distinction in the case of its Belt and Road program and allow overseas investments by Chinese companies who wish to do so under that program.

“The belt and road program is the government's strategy. I think that is different. Corporations will find the match in terms (their) business vision and growth strategy and the government's strategy on infrastructure and global collaboration in development,” he said.